JAKARTA: Bank Indonesia Wednesday set two rupiah intervention
JAKARTA: Bank Indonesia Wednesday set two rupiah intervention rates - departing from its usual practice of just setting one - to contain sudden surges in liquidity in the money market, a central bank official said.
This is a new policy, the official, who declined to be named, said.
The intervention rate - or the rate that the central bank pays commercial banks for funds placed with the monetary authority - was at 12.625 percent in the morning, the official said.
But in the afternoon, the rate was halved to 6.3125 percent, the official said.
Commercial banks usually dump relatively huge amounts of rupiah funds with the central bank in the afternoon, if they fail to lend them out at favorable rates in the money market.
Bank Indonesia wants to discourage banks from doing just that, the official said, by setting a lower intervention rate in the afternoon.
The central bank doesn't want to pay out so much cash at one go, the official added. -- Dow Jones
U.S. industrial activity drops
WASHINGTON: Industrial production fell by 0.3 percent in August, the first decline in eight months, a fresh sign of the faltering economic recovery.
The latest snapshot of industrial action at the U.S. factories, mines and utilities reported by the Federal Reserve Tuesday was much weaker than the performance many analysts were expecting. They were forecasting a rise in industrial production of around 0.1 percent or 0.2 percent.
The 0.3 percent drop was the first decline since December, when the nation's economy was still trying to claw its way out of a recession that began in March 2001.
"It is a setback, but hopefully only a brief one," said Carl Tannenbaum, chief economist for LaSalle Bank.
The weak performance in August came after industrial activity rose by a modest 0.4 percent in July, according to revised figures. That increase was twice as big as the 0.2 percent advance the Fed previously reported. - AP
China's forex reserves hit $253b
BEIJING: China's foreign exchange reserves hit US$253 billion at the end of August, state media said Wednesday, citing central bank governor Dai Xianglong.
The country's reserves, reported by the central bank-run Financial News daily, were up $40.8 billion since the beginning of the year.
The vast majority of China's foreign reserves, the second- largest in the world after Japan's, are in U.S. dollars, while the euro makes up an undisclosed share.
Governor Dai said earlier this year the euro was the second largest currency in its reserves but declined to provide details. -- AFP
ADB to increase lending to China
MANILA: The Asian Development Bank (ADB) said Wednesday that it planned to increase its annual lending to China by 50 percent to US$1.5 billion starting next year.
The increase in lending for 2003-2005 is aimed at helping China restructure its economy and reduce poverty in its central and western regions, a bank statement said.
More than 90 million Chinese still live on less than a dollar a day, down from twice that number in the 1990s, it said.
The ADB is to finance road and rail projects in the provinces of Gansu, Yunnan, Ningxia and Sichuan, it added.
It will also finance projects to develop cleaner sources of energy, and improve management and conservation of soil and water, the bank said. -- AFP